Rate-based Carbon Pricing Mechanism Design and Macroeconomic Impacts

Abstract/Contents

Abstract: This paper studies the market design and macroeconomic aspects of carbon pricing. Based on a firm-level intertemporal decision model, this paper argues that an auction should be adopted as the allocation method for emissions allowances. It further examines the dynamics of allowances demand through four auction-based allocation formats. Using panel data from 11 member countries in the European Union Emissions Trading System (EU ETS) between 2005 and 2021, this paper performs regression analyses that show a moderately positive impact of carbon pricing on the overall price level of an economy.

Author	Yang, Daniel
Thesis advisor	Taylor, John

DOI	https://doi.org/10.25740/kc898fs7170
Location	https://purl.stanford.edu/kc898fs7170

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License: This work is licensed under a Creative Commons Attribution Non Commercial 4.0 International license (CC BY-NC).

Preferred citation: Yang, D. (2022). Rate-based Carbon Pricing Mechanism Design and Macroeconomic Impacts. Stanford Digital Repository. Available at https://purl.stanford.edu/kc898fs7170

Stanford University, Department of Economics, Honors Theses

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